The Bush administration is leveraging tens of billions of dollars in seized Iraqi assets to force the Iraqi government to accept several demands in a long-term deal on keeping US troops in Iraq. The demands have included maintaining fifty-eight permanent military bases in Iraq, immunity for American troops and contractors, a free hand to conduct military operations without Iraqi approval and control of Iraqi airspace. We speak to journalist Patrick Cockburn of the London Independent, who broke the story last week. [includes rush transcript]

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Middle East correspondent for the London Independent and author of several books. the latest is called Muqtada: Muqtada al-Sadr, the Shia Revival and the Struggle for Iraq.

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This is a rush transcript. Copy may not be in its final form.

JUANGONZALEZ: Following outcry by Iraqi lawmakers, the Bush administration is now offering limited concessions in its demands for a long-term “status of forces” agreement between Iraq and the United States.

The deal sought by the Bush administration, details of which were leaked to the press, were seen as a way of extending the US occupation of Iraq indefinitely. The demands included maintaining fifty-eight permanent military bases in Iraq, immunity for American troops and contractors, a free hand to conduct military operations without Iraqi approval, and control of Iraqi airspace. According to the London Independent, the US is now lowering the number of bases it wants from fifty-eight to “the low dozens” and says it is willing to compromise on legal immunity for foreign contractors.

The negotiations are being held before the UN mandate authorizing the US occupation expires at the end of the year. The Independent of London reported last week the US is leveraging tens of billions of dollars in seized Iraqi assets to push through its demands.

AMYGOODMAN: British journalist Patrick Cockburn broke this story last week. He is the Middle East correspondent for the London Independent and has reported from Iraq for many years now. He is the author of several books, including The Occupation: War and Resistance in Iraq. His latest is called Muqtada: Muqtada al-Sadr, the Shia Revival and the Struggle for Iraq. Patrick Cockburn joins us now from Washington, D.C.

Welcome to this country, Patrick.

PATRICKCOCKBURN: Thank you very much.

AMYGOODMAN: Can you lay out for us exactly what the deal is and how you uncovered it?

PATRICKCOCKBURN: Well, this is an extraordinary, important development in Iraq. It really will determine whether Iraq is an independent country or not. Or will it be a client state of the US?

As you reported, the US negotiators were demanding initially fifty-eight bases. They’re not calling them permanent bases, though that’s exactly what they are. The bases might have, let’s say, an Iraqi soldier outside and a single strand of barbed wire, in which case the Iraqis will supposedly be in charge of their defense, so it won’t be an American base. But everybody knows that it is.

Then there’s the question of immunity for American soldiers and Iraqi contractors, i.e. they won’t come under Iraqi law. And the US will also control airspace and have various other rights.

Now, although Ryan Crocker and President Bush are saying Iraq under this new agreement will once again be a sovereign nation, most of the rights we associate with a sovereign nation will be in the possession of the US.

JUANGONZALEZ: And in terms of the reaction in Iraq among the various forces there, as news of this has begun to dribble out?

PATRICKCOCKBURN: There’s been an explosive reaction, because this is a deeply divisive demand by the US. There will be some Iraqis who will be willing to accept it, mainly maybe the Kurds. There will be others in the government who will do it. But there will be many other Iraqis, almost certainly a majority, who will see this agreement as showing that the Iraqi government is a puppet of the US. It will delegitimize it. It will lay the basis for a further deepening of the war in Iraq. So it’s an extraordinary — you know, Iraq is full of spurious invented turning points, but this really is a turning point for Iraq.

JUANGONZALEZ: Now, your article suggests that Prime Minister al-Maliki himself is opposed to major parts of this proposal?

PATRICKCOCKBURN: Yes, I mean, he’s — mostly can see the downside for himself, that this is going to go down real badly with a lot of Iraqis, including people in his own majority Shia community and including people in the coalition of parties which make up his own government. And one of the senior members of his own party was saying the Americans have asked for immunity for everybody and everything, apart from the dogs they bring to Iraq. So this is not very good news for him.

But on the same time, he and his government feel at the end of the day they depend on the US, and they’re under very intense personal pressure from President Bush and Dick Cheney’s office, according to Iraqi officials I’ve spoken to, and it will be difficult for them to stop this happening. And they’ve been given a deadline of the 31st of July.

AMYGOODMAN: Patrick Cockburn, how is the US leveraging billions of dollars to try to force through this agreement?

PATRICKCOCKBURN: Well, the Iraqi reserves, the Iraqi money, is in the Federal Reserve Bank of New York. The reason it’s there is historical and rather surprising. It dates from 1990, when Saddam Hussein invaded Kuwait, and there are still really sanctions against Iraq as a danger to the rest of the world. That money, about $50 billion, is in the bank. But there have been many court cases brought against it. It’s protected currently by a presidential immunity. And what US negotiators in Baghdad have been implying to their Iraqi counterparts is that if they don’t cut a deal on American terms, then that presidential immunity might lapse at the end of the year, and the Iraqis wouldn’t be able to get their hands on these massive reserves, which they need very badly.

AMYGOODMAN: We’re talking to Patrick Cockburn. He broke the story of the US proposal to Iraq that the US is pushing through right now, which includes more than fifty military bases. Now, can you explain that? And also comment on John McCain, the once again controversial comment he made about war. This time it was on NBC. He was talking about — when asked when he thinks US troops will return from Iraq, “That’s not too important. What’s important is the casualties in Iraq. Americans are in South Korea…Japan…in Germany. That’s all fine.” But talk about that and these bases.

PATRICKCOCKBURN: You know, I’ve been going to Iraq since 1977. I spend much of my time there. I think it’s frankly a fantasy world, because Iraq — most Iraqis don’t like the occupation. There’s nothing surprising about this. Most — few countries do. So long as there is a US army there, there’s going to be resistance to it. And this current agreement will probably increase the level of violence. Now, the number of American soldiers being killed has dropped from maybe three a day to one a day, but it could go right up again at any moment.

I think Senator McCain’s idea that somehow with the end of the road, with a pacified Iraq, where you can have a United States Army sitting there, wholly accepted by the local population, and that there will be no armed attacks on it is a complete misunderstanding of the situation, you know, and it’s part and parcel of what he’s been saying for a year, that the situation in Baghdad is better than has been reported. I mean, honestly, I wish it was. I wish I could go out and report this, but — and he has the advantage — but he’s wrong. And it’s so dangerous. It’s still very difficult for reporters to really get around Baghdad and stay in one piece.

JUANGONZALEZ: Patrick Cockburn, I’d like to ask you, in our headlines we mentioned this new attempt by the US military in Iraq to begin utilizing or turning over areas now to Shiite militias, as well, to patrol, similar to what they were doing with the Sunnis in Anbar and other areas. Your response to this increasing reliance on not even the Iraqi military, but on militias by the US military to basically pacify areas of Iraq?

PATRICKCOCKBURN: Yeah. This is based on what happened in Anbar province, this enormous province west of Baghdad, about eighteen months ago, when there was a reaction among the Sunni tribes against al-Qaeda in Iraq. The US Army has been trying to replicate that in other parts of Iraq, mostly in Sunni areas, and they’ve been trying to now in Shia areas. A lot of this is hiring — getting local guns for hire and paying them. But first of all, these people are often — outside Anbar, are sometimes local bandits. They may have some loyalty to their employers, the US government, but they certainly don’t have any loyalty to the Iraqi government.

I think that by doing it in Shia areas, this is going to create local civil wars. Most of these people don’t have — in Shia areas, don’t really have much support. I mean, there’s a desperation for jobs, a desperation for salaries. You can always hire a man with a gun in Baghdad. But I think this is very divisive and will lead to fighting, lots of killing, if they try and introduce this in places like Sadr City, where Muqtada al-Sadr’s followers, the Mahdi Army, has mass support. There are — a lot of dead bodies are going to start turning up in the side streets.

AMYGOODMAN: Patrick Cockburn, if this is pushed through before this president leaves office, how does it bind a future president? And what is your assessment of what these presidential candidates in the United States are suggesting for the end of war in Iraq?

PATRICKCOCKBURN: Well, you know, they’re describing it as a security agreement and saying, well, we have such agreements with eighty countries. But, I mean, this is frankly baloney. I mean, the other countries do not have an American army present which is under continual armed attack. It’s a very different type of agreement. And of course the reason they’re saying this is that they don’t want to submit it to Congress, and they also don’t want to submit it to a referendum in Iraq. In both cases, it might go down.

I think that the candidates — I mean, what strikes me, being in Washington, is the degree to which America is absorbed in the presidential election, and Iraq has been far too much on the margins of the news, as if nothing new was developing there or the situation might be bad but it’s not getting much worse, while these enormously important developments are taking place, which are laying the basis for future violence, for future wars, not exactly going through on the nod, but they’re being smuggled through. Their significance is being downplayed by the US ambassador in Baghdad, by the administration here in Washington. And this is taking place while the whole focus is on the presidential election here.

JUANGONZALEZ: And how essential is this security agreement for a possible extension of the United Nations mandate in Iraq?

PATRICKCOCKBURN: Well, they could extend it six months. They could extend it longer. I mean, the United Nations could certainly do this. I don’t think there’s an enormous problem there, though it leaves lots of issues hanging in the air. In some ways, bringing up this over the last — initially, there was a lack of attention in Iraq to what was happening. Now there’s an explosive reaction as details leak out about this agreement. So, there are more Iraqis, including in the government party, saying on the record, “Well, maybe we don’t need the Americans at all if our sovereignty is going to be so compromised.”

AMYGOODMAN: Patrick, could you explain this refusal to lift the UN designation of Iraq as a threat to international security, which started with Iraq’s invasion of Kuwait, even though Saddam Hussein has been executed, that makes it easier for claims against Iraq, like particularly from corporations?

PATRICKCOCKBURN: Yeah. I mean, there are these series of measures against Iraq which were originally, you know, were enforced in 1990, when Saddam invaded Kuwait, but these have all remained pressures on Iraq over the years. This diminished formal sovereignty has made them vulnerable to legal charges, means they don’t quite have control over their own funds.

For instance, last year — I mean, theoretically these funds are all controlled by Iraq. But last year, the senior Iraqi financial officials told me that they wanted — all these funds are denominated in dollars. The dollar was sinking. The Iraqi finance minister in Central Bank thought, right, we wanted to denominate these. We don’t want to take the money out of New York. We want to denominate some of it in other currencies, in Euros, in gold, in whatever else, which won’t lose its value. And the US Treasury said, no, we don’t want that, because that will make the dollar look bad. So they couldn’t do it. And they were telling me a month or so ago they thought that this decision by the US Treasury had cost them $5 billion.

So, this is part of a pattern that you have the US making formal obeisance to Iraqi sovereignty, an independent nation, but in practice having minute control over everything that the Iraqi government does.

AMYGOODMAN: Patrick Cockburn, we want to thank you very much for being with us. His brand new book is called Muqtada: Muqtada al-Sadr, the Shia Revival and the Struggle for Iraq. Patrick Cockburn, just recently back from Iraq, has been reporting on Iraq for decades.

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